This paper investigates the interplay between governance and disclosure in an agency setting, featured by concentrated ownership and high insider shareholders representation in the board. In this context, agency conflicts happen between large controlling shareholders and minority outside investors, with risks of private benefits exploitation. We regressed a voluntary disclosure index on seven governance variables related either to the board structure and functioning. The empirical evidence is provided by the Italian stock market. Our results suggest the presence of a complementary relationship between governance and disclosure. Diligent monitoring activity is associated with greater transparency to the outside. The findings are consistent with the view that internal and external control tend to be present at the same time, since the presence of one of them reduces the incentive for the controlling shareholders to limit the other. The empirical evidence also show that larger boards are not detrimental to outside shareholders, with regard to voluntary disclosure. The study can contribute to the understanding of the relationship between governance and disclosure in a particular agency setting. They might be of interest to practitioners and regulators, insofar as they are consistent with calls for more disclosure requirements in this agency setting

Purpose -This purpose of this paper is to investigate the determinants of board and audit committee meeting frequency. Design/methodology/approach -The determinants studied are related to the ownership structure and to the board characteristics. The study is conducted in an agency setting featured by high ownership concentration and large insider shareholders. Hypotheses are developed based on agency theory. The empirical evidence is provided by a sample of Italian listed companies. Negative binomial regression is used in the multivariate analysis to test the relationships. Robustness checks provide further empirical support. Findings -The paper finds that insider ownership negatively impacts -either on the board or on the audit committee meeting frequency -whilst the proportion of independent directors in the board has a positive impact. This evidence is consistent with the hypothesis that insider ownership and board independent monitoring are substitute control mechanisms. The findings also show that audit committees are more active in larger firms. Originality/value -The paper provides an agency theory-based explanation of the board and the audit committee meeting frequency, in a setting featured by large controlling shareholders.

Purpose The purpose of this paper is to explore whether intellectual capital affects the probability that a particular firm will default. The authors also test whether including intellectual capital performance in bankruptcy prediction models improves their predictive ability. Design/methodology/approach Using a sample of US public companies from the period stretching from 1985 to 2015, the authors test whether intellectual capital performance reduces the probability of bankruptcy. The authors use the VAIC as an aggregate measure of corporate intellectual capital performance. Findings The findings show that the intellectual capital performance is negatively associated with the probability of default. The findings also indicate that the bankruptcy prediction models that include intellectual capital have a superior predictive ability over the standard models. Research limitations/implications This paper contributes to prior research on intellectual capital and firm performance. To the best of the knowledge, this is the first study to show that the benefits of intellectual capital extend from superior performance to long-term financial stability. The research can also contribute to bankruptcy studies. By using a time frame covering decades, the findings suggest that intellectual capital performance measures can be included in bankruptcy prediction models and can effectively complement traditional performance measures. Originality/value This paper highlights that intellectual capital is associated with long-term financial stability and a lower bankruptcy risk. Firms realising the potential of their intellectual capital can produce a virtuous circle between higher performance and greater financial stability.

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